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ID: 2479906 • Letter: T
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Antuan Company set the following standard costs for one unit of its product.
Direct materials (4.0 Ibs. @ $5.00 per Ib.)
$
20.00
Direct labor (1.6 hrs. @ $13.00 per hr.)
20.80
Overhead (1.6 hrs. @ $18.50 per hr.)
29.60
Total standard cost
$
70.40
The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level.
Overhead Budget (75% Capacity)
Variable overhead costs
Indirect materials
$
15,000
Indirect labor
75,000
Power
15,000
Repairs and maintenance
30,000
Total variable overhead costs
$
135,000
Fixed overhead costs
Depreciation—building
23,000
Depreciation—machinery
72,000
Taxes and insurance
18,000
Supervision
196,000
Total fixed overhead costs
309,000
Total overhead costs
$
444,000
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (61,000 Ibs. @ $5.10 per lb.)
$
311,100
Direct labor (28,000 hrs. @ $13.40 per hr.)
375,200
Overhead costs
Indirect materials
$
41,950
Indirect labor
176,850
Power
17,250
Repairs and maintenance
34,500
Depreciation—building
23,000
Depreciation—machinery
97,200
Taxes and insurance
16,200
Supervision
196,000
602,950
Total costs
$
1,289,250
9.
Required information
Required:
1&2.
Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.
3.
Compute the direct materials cost variance, including its price and quantity variances.
Required information
4.
Compute the direct labor cost variance, including its rate and efficiency variances.
12.
Required information
5.
Prepare a detailed overhead variance report that shows the variances for individual items of overhead.
If you could let me know if I have made any mistakes I would really appreciate it very much.
Thanks
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Antuan Company set the following standard costs for one unit of its product.
Explanation / Answer
Answer:
You have not made any mistakes.
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